Converting of debentures out of debit balance cannot be treated as diversion of funds

Addl. CIT Vs G.S. Pharmbutor P. Ltd. (ITAT Delhi) It is undisputed fact that the assessee has not given any loan or advances during the year. As can be seen from the copy of account of M/s. Moderate Leasing & Capital Services Limited, assessee has been paying advances and loan to the said company from time to time and was also being repaid by the said company. All throughout, there were debit balances right from the assessment year 2006-07. In the FY 2011-12, the assessee has converted its debit balance of Rs.29.13 crores into convertible debentures on 30.04.2011 for a sum of Rs.28 crores....